China's growth remains stellar as managed slowdown takes hold

China's official growth target for 2013 is 7.5 per cent, which is the slowest pace in 23 years.

AFP

The latest growth figures from China were highly anticipated given concerns the world's second biggest economy is in the midst of a slowdown.

There was little doubt that China's annualised growth would dip from the previous reading of 7.7 per cent - the question was by how much.

The result of 7.5 percent growth in gross domestic product (GDP) in the second quarter was welcomed because it was in line with forecasts, and to use jargon from the global financial crisis, "less worse than expected" given recent sombre data releases.

Today's result is a long way from the 12.08 per cent annualised growth achieved in 2010, as Chinese authorities continue with their strategy of a managed slowdown.

Newly-appointed Federal Treasurer Chris Bowen would also be watching the China numbers with interest, given his recent downbeat comments about Australia's economy.

Despite the slowing, the pace of economic growth in China remains stellar: urban investment grew at an annualised 20.1 per cent; retail sales expanded at an annualised pace of 13.3 per cent; and industrial output grew at an annualised 8.9 per cent

China's National Bureau of Statistics has described the results as "stable", suggesting the government does not see the need for stimulus to protect the economy from a hard landing.

While the Chinese government's official growth target for 2013 is 7.5 per cent, it remains the slowest pace in 23 years.

A significant concern for Chinese authorities is whether the slower economic times add to the jobless rate, which could result in social unrest as workers are turned away from cities when projects dry up.

The Australian dollar jumped to 91.09 US cents after the data hit, suggesting investors remain confident that China's demand for resources will continue to underpin Australia's economy.

But it is now very clear that any piece of data from China will be scrutinised and anticipated as investors hedge bets on the lifespan of the China growth story.